A Market in Little Saigon
  • CM
  • A market in Little Saigon.

This post draws from two books (Dean Baker's The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer and Jane Jacobs's The Death and Life of Great American Cities) to propose that small businesses make the best economic sense when in dense and big cities and not in rural areas or even the suburbs. What makes sense in low-density areas is exactly Walmart. Mom-and-pop shops are terribly inefficient mediums for the distribution of goods and services at low densities. It's much better to concentrate all of these little needs and wants into one mega-store that can accurately manage inventory and provide large-scale storage and refrigeration. True, Walmart is not friendly to its workers and sends a considerable part of its profits into the hands of a few executives and owners at the top. But this does not mean the solution to Walmart's exploitation is a return to the idiocy of mom-and-pop shops. What's needed is not a reversion but a kind of rural/suburban nationalization of Walmart. (For inspiration along these lines, read Fredric Jameson's "Wal-Mart as Utopia.")

Small businesses are only viable in big and concentrated cities. These areas can sustain them (nail shops, sex shops, ice cream shops, and so on) and mix them with medium- and large-scale enterprises. This point is not at all original or controversial; it was made over 50 years ago by the leading American urbanist of the 20th century, Jane Jacobs. But here is another point I want to make: Americans invest a lot of political emotion into the heroic narrative of the small-business owner. They like to see in this figure a royal road to fulfilling the big dream of becoming your own boss—the ultimate form of independence. The government's recognition (and perpetuation) of this powerful feeling is translated into numerous and generous subsidies, or, to use the words of Dean Baker, "favorable tax treatments." Welfare queens have nothing on small businesses.

I have nothing against subsidies for small businesses, but I suspect that they make more sense for shops in the city and not those in the rural areas and the suburbs. In fact, I fully suspect that these benefits sustain a lot of small businesses that should otherwise be dead, and the consequence of this imitation of real retail is the maintenance of a way of life (suburban life) that is neither economically nor environmentally practical. And so, in the end, it's businesses in and inhabitants of the urban core that are in effect supporting these small and inefficient mom-and-pop ventures in low-density areas. The city is paying, by way of a government box office, for what amounts to a show or performance or play of small-town people doing business the American way. As if that weren't enough, this massive form of government welfare results in lots of votes for the GOP. Men and women who have fictionalized themselves as the type deserving to be rewarded for entrepreneurial spirit and hard work tend to vote for that fiction of a party.